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Soybeans, meal give back gains with corn, wheat mixed

Soybeans were modestly lower on profit taking and technical selling. Beans followed the lead of bean meal, which was down after its recent round of contract highs. Domestic soybean meal demand is strong and crush margins remain in positive territory. Soybean oil was up on an oversold bounce and a higher move in palm oil ahead of the U.S. session. Argentina continues to be a bullish background factor with recent rainfall doing little to alleviate expectations for a significantly smaller crop this year. However, that might be more than made up for by record production in Brazil. The USDA’s next round of supply, demand, and production estimates is out March 8th. Brazil’s cash basis has gone negative for the first time since 2021 on the harvest picking up steam and those record production expectations. The NOPA’s January member crush is out Wednesday, with the total and soybean oil stocks both expected to be up on the month, but down on the year.

Corn was mixed on bear spreading. Mexico says it will ban some imports of GMO corn, while allowing some other imports until there are alternatives. There’s still some time for negotiations, but the announcement caught the USDA and industry groups off-guard and could be challenged under the USMCA. Mexico is a key market for U.S. corn. Corn is watching the second crop planting pace in Brazil, which has been limited by the slow soybean harvest pace. Brazil and Ukraine still have a near-term price advantage over U.S. corn, but that’s expected to invert next month, opening up a narrow window. Even with those delays, the trade is still expecting a big second crop out of Brazil with CONAB’s next estimate scheduled for March 9th. The domestic cash basis remains at high levels, despite slow exports and lower ethanol use. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday.

The wheat complex was mostly lower, with Chicago and Kansas City down on profit taking and Minneapolis mixed on bull spreading. Wheat is watching the coverage and totals for precipitation this week in parts of the central and southern U.S. Plains. The trade is also monitoring conditions in the northern U.S. Plains and Canada ahead of spring wheat planting. Export demand is slow with U.S. prices above competing exporters. Russia continues to hold the advantage and Ukraine is still moving out grain, but an extension of the current version of the Black Sea Grain Initiative is a question mark because of complaints about fairness from Moscow, which comes nearly a year into the war Russia started. Ukraine claims Russia is reducing the pace of exports by a slowdown in the inspection paces. The slow export demand for U.S. wheat is somewhat buffeted by good domestic demand.

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